A row of six adjoining conservation shophouses in Tanjong Pagar has been put up for sale at an indicative price of $57.8 million.

The guide price for the units – 48 to 56 Peck Seah Street – works out to about $2,900 per sq ft, based on the existing gross floor area of 19,938 sq ft. The shophouses sit on three separate land lots and have a combined land area of 8,213 sq ft. The site is zoned commercial under the Chinatown (Tanjong Pagar) Historic District Conservation Area in the 2014 Master Plan.

The units, which are owned by a fund managed by Phoenix Property Investors, have a 33m-wide road frontage and are near the Tanjong Pagar MRT station.

The private equity property fund acquired the shophouses in January 2015 for $42.8 million from shipping firm K Line (Singapore).

New projects in the area include Tanjong Pagar Centre, the upcoming Frasers Tower and the redevelopment of CPF Building.

Fragrance Foodstuff which is famous for Bak Kwa, bought 2 prime adjoining shophouses along New Bridge Road where it leased the ground floor space for its flagship outlet for about 12 years. It paid S $20.5M for the shophouses, which sit on 99-year-tenure land. The land they sit on has a balance of 77 years remaining. The combined landed area is 1728sqft, thus translate the purchase to around $3535 psf based on gross floor space of 5800sqft. The seller is Yeah Capital Pte Ltd, which is owned by the family controlling ValueMax Group of pawnbroking shops.

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A PAIR of adjoining shophouses less than 20 metres from Telok Ayer MRT Station have changed hands for S$18.2 million. Both shophouses are three storeys high and with an attic. One is on a site with 199-year leasehold tenure (starting June 2003) and the other is on a 999-year leasehold site.

The price paid translates to around S$2,600 per square foot on the built-up area of nearly 7,000 square feet – which is believed to be one of the highest on Telok Ayer Street.

PropNex brokered the transaction.

The two shophouses are understood to have been sold by the owners of a corporate service and consultancy group to Spanish tycoon Ricardo Portabella Peralta, who last year picked up two adjoining condo units at Seven Palms Sentosa Cove for S$28.55 million.

One of the shophouses is leased to a Japanese restaurant on the ground level with a shipping company on the upper levels. The other shophouse used to be occupied by the seller but is now vacant.

Other shophouse deals done in the past few months include Madras Hotel along Madras Street in Little India which sold for nearly S$12.5 million; the property is on a site that has a balance lease term of about 78 years. Also transacted were a freehold property along Pagoda Street that fetched S$9.5 million and another shophouse, also freehold, in Stanley Street that commanded S$8.8 million.

In the secondary settlement conservation area of Joo Chiat, six strata units on the ground and upper levels in the front portion of three adjoining shophouses changed hands at S$7.9 million or S$832 per square foot of strata area. The buyer is Silk Road Property Partners. Knight Frank brokered the deal.

CBRE’s analysis of shophouse transactions showed that 11 caveats were registered in October for properties totalling S$54.85 million. In the third quarter of this year, there were 24 caveats amounting to S$157.12 million.

Since the introduction of the total debt servicing ratio (TDSR) in late-June 2013, the level of shophouse transactions in most quarters has hovered at around 20-plus transactions totalling below S$200 million.

Sammi Lim, CBRE associate director, investment properties, said: “Shophouse prices continue to hold steady, on the back of limited stock as well as very strong demand from investors and end-users with a mid to long-term horizon.”

Market watchers note that although the volume of shophouse transactions has eased following the introduction of TDSR, prices are generally holding firm for conservation shophouses in prime CBD areas. The key factor is to have a good location with high footfall as that will be able to attract high-paying ground-floor tenants in the F&B business.

Moreover, said Historical Land director Simon Monteiro, shophouses on pure commercial zoned sites are something foreigners are allowed to buy – which adds to their draw.

“A lot of UHNW (ultra high net worth) buyers including foreigners are looking into this heritage property class in Singapore – with an eye on capital appreciation, because of the scarcity of shophouses.”

Gross yields come to sub-3 per cent, he added.

CBRE’s Ms Lim noted that while shophouses in the CBD have traditionally been the focus for investors, properties in the CBD fringe and in the East are moving into the spotlight. “There appears to be a major shift in tenant profiles in these shophouses; with strong demand from established F&B tenants, and tenants who are keen to explore non-traditional spaces, in non-conventional office layouts. Adjoining shophouses, in particular, are very much sought after because they enjoy economies of scale and flexibility of usage.”

Ms Lim predicts a “moderate 5-10 per cent appreciation” in prices of shophouses over the next six months. “Speculators are virtually absent. The lower number of transactions reflects owners holding on to their assets as they anticipate more upside in time to come.”

Two adjoining commercial shophouses in Chinatown have been put up for sale at an indicative asking price of S$30 million.

The units, 54 and 56 Pagoda Street, are on the main pedestrian thoroughfare in the heart of Chinatown.

They have a combined land area of 3,010 sq ft and a built-in area of 9,226 sq ft.

Under the Master Plan 2014, the three and a half-storey conservative shophouses are zoned “commercial” within the Kreta Ayer Historic District.

They are fully occupied. The ground floor is leased to two retail shops, and the upper floors, accessible via an external staircase, are leased to three office tenants. Both units have a 99-year leasehold tenure that began on Oct 30, 1995.

Christina Sim, director of capital markets at Cushman & Wakefield, said: “This sale represents a rare opportunity to own two units in the heart of busy Chinatown with its unique history and heritage. We expect interest to come from traditional homegrown house brands within Chinatown that require tremendous visibility for their business, high-net-worth investors and institutional funds seeking a trophy heritage property in downtown Singapore.”

Cushman & Wakefield has been appointed to sell the shophouses; the Expression of Interest will close at 3 pm on Nov 27.

The shophouses are just 50m from Chinatown MRT station, and enjoy significant pedestrian footfall throughout the year, especially during key festivals such as the Lunar New Year and the Mid-Autumn Festival.

A CONSORTIUM led by property investor Stanley Quek has picked up a couple of adjacent shophouses in Duxton Hill for S$19.6 million. The properties, which have three storeys and an attic, are on two separate land lots; however the units are linked, forming a distinctive corner shophouse lot. Tenants on the street level include Italian restaurant Latteria, which has also leased the open space next door from the state on a temporary occupation licence to operate an alfresco dining area.

The upper levels are leased to office tenants, the biggest of which is Duxton Asset Management, a leading international and boutique asset manager that focuses on agriculture and Asian emerging markets. The group’s two founders, Ed Peter and Desmond Sheehy, through their own private company, are the sellers of the pair of Duxton Hill shophouses.

The two properties are said to be the last shophouses owned by Mr Peter along Duxton Hill; at one time, he was one of the biggest owners along the street.

When contacted, Dr Quek told The Business Times the price he paid translates to about S$2,200 per square feet on a floor area of slightly below 9,000 sq ft. “It’s a fair value to pay for a corner property in a prime conservation area…”

Zoned for commercial use, the shophouses have a total land area of 2,540 sq ft and a balance tenure of 72 years.

Leases for the main tenants still have some time to run. “We’ll be getting 4 per cent gross yield based on the purchase price,” said Dr Quek.

The doctor turned developer and property investor stitched together a small consortium of close friends for the acquisition.

Another recent transaction, this time in the private residential market, is the S$21.07 million sale of a townhouse at the freehold Bishopsgate Residences by its developer, Kajima Overseas Asia. The buyer is a foreign-incorporated company. The price works out to S$3,465 psf based on the strata area of 6,081 sq ft. The townhouse has direct access to a basement carpark. On the ground level of the unit are a bedroom and a family area. The master bedroom and two other bedrooms along with the kitchen, dining and living areas are on the second level. The unit comes with a private rooftop pool. The townhouse comes fully furnished; the interior design was done by Hirsch Bedner Associates.

Bishopsgate Residences, which received Temporary Occupation Permit in late 2012, has four townhouses and 27 apartments.

These include one at Hongkong Street that changed hands at S$14.45 million. The price works out to about S$1,780 per square foot on gross floor area (GFA) of some 8,100 sq ft. Located at 31 Hongkong Street, the shophouse is on a 1,747 sq ft site with a 99-year lease topped up in December 2007.

The price is lower than the S$1,899 psf on GFA fetched for another shophouse on the same street, at No 39, in March.

This can be partly attributed to the land area for No 31 being 20 per cent smaller than No 39. Moreover, the balance lease term of 91 years for No 31 is shorter compared with the remaining land tenure of 97 years for No 39.

For both properties, their respective maximum GFAs allowed based on the 4.2 plot ratio designated for the area have been achieved; that means there is no untapped GFA. The area is zoned for commercial use under the Urban Redevelopment Authority’s Master Plan 2014.

Hongkong Street is part of the Upper Circular conservation area, a secondary settlement – which means the front of the building has to be conserved but the rear can go up to six storeys.

The seller of No 31 is understood to be a shipping company that will take a short-term lease from the buyer, 8M Real Estate. Thereafter, 8M Real Estate plans to spruce up the asset and bring in a food and beverage tenant on the ground floor and office tenants on the upper levels, said 8M Real Estate director Ashish Manchharam, who set up the boutique property investment outfit late last year. He was formerly from JLL’s investments team.

What drew me to Hongkong Street, he said, is how the location is being revitalised with the entry of new F&B operators. Office tenants also like the area as it is near the CBD and close to Clarke Quay MRT Station, he added.

The ground floor of No 39, which changed hands earlier this year, will soon be home to the award-winning restaurant Bacchanalia, which closed earlier this month at its old premises at the Masonic Hall in Coleman Street.

Other trendy eateries and watering holes along Hongkong Street include bars Vasco and 28 Hongkong Street, and Spanish restaurant FOC. The F&B business in the location will be supported by the opening of a couple of new boutique hotels along Hongkong Street, said Mr Manchharam. Existing hotels on the street include Fragrance Hotel and Hotel Clover.

8M Real Estate also owns five shophouses at 112 -116 Amoy Street, as well as 22 Gemmill Lane behind. Luke’s Oyster Bar & Chop House will occupy the ground floor of 22 Gemmill Lane later this year.

8M Real Estate is looking for restaurant operators for its 10,000 sq ft ground floor space at its Amoy Street asset to replace Beng Hiang Restaurant, which has moved out. Office tenants on the upper levels include Telstra units Ooyala and muru-D.

Other recent shophouse deals include OCBC’s sale of two adjoining shophouses at 743 and 745 Havelock Road for S$12.11 million. The sale was done through a tender handled by Knight Frank.

The bank has also sold 382 Geylang Road for S$5.1 million.

At a Colliers International auction last week, a two-storey freehold corner shophouse at 362 Tanjong Katong Road was sold for S$6.35 million. At the same auction, two strata commercial units at 1 and 1B Figaro Street were sold together for S$6.45 million. The units are on the ground floor in a row of two-storey shophouses, which have a 9,999-year leasehold tenure. These three properties were sold by Bamboo Group and marketed jointly by Historical Land and Colliers.

Most sellers are sticking to their asking prices, believing in the rarity value of shophouses; moreover these properties would already be generating rental income. However, TDSR (total debt servicing ratio)-hit buyers have to come up with more cash. With owners’ asking prices translating to 2.5 to 3 per cent gross yields – barely covering borrowing cost – it may not be a very compelling proposition for the buyers, said Ms Sai.

Three adjoining shophouses in Jalan Besar have been put up for sale with a guide price of about $16.5 million.

CBRE, the sole marketing agent, yesterday called for expressions of interest in the double-storey freehold shophouses, each of which has an attic.

The shophouses, with a combined land area of 4,353 sq ft and a total gross floor area of 9,719 sq ft, are in an area zoned for commercial use in the Historic District (Little India) Conservation Area in the 2014 Master Plan, said CBRE.

CBRE’s associate director of investment properties Sammi Lim said the guide price of $16.5 million for all three shophouses works out to $1,697 per sq ft.

With 14m of street frontage for all three shophouses, they are highly visible in Jalan Besar.

The site is a short walk from Farrer Park MRT station. The upcoming Jalan Besar MRT station will be about 100m away.

Ms Lim said: “Shophouses along Jalan Besar are always tightly held and it is extremely rare for any to be available for sale. For 138 to 142 Jalan Besar, the vendor has been occupying the premises over the past few decades.” She added that there has been “increased interest from the market for such quality shophouse assets on the fringe of the Central Business District for mid- to long-term hold”.

“We term these shophouses as a limited-edition asset in the property market that comes with a distinctive facade, unique charm and rich historical value; and three adjoining shophouses in a row in a centrally located area is an extremely rare opportunity,” said Ms Lim.

An expression of interest sale gives potential buyers a specific period of time to view the properties and to make their offers to purchase by a specified time and date.

Since the property is a commercial one, the expression of interest exercise is open to both locals and foreigners, with no additional buyer’s stamp duty or seller’s stamp duty imposed on the purchase of the property, said CBRE.

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